The chair of the Senate Armed Services Committee has said he expects the panel to “very seriously” consider proposals to the next defense policy bill that would implement recommendations from the commission tasked with reforming the Pentagon’s budget planning process.
Sen. Jack Reed (D-R.I.), who has led the call for updating the Planning, Programming, Budgeting and Execution (PPBE) process for several years, told reporters on Monday that SASC remains “on schedule” to mark up the fiscal year 2025 National Defense Authorization Act by May.
“We should be ready, I hope, by May to begin seriously thinking about the [NDAA]. Getting it onto the floor is a very difficult challenge, as always, because that is [in] competition with other important legislative initiatives. But, at this point, we’re still on target,” Reed said during a Defense Writers Group discussion.
The 14-member PPBE commission, which was mandated by the FY ‘22 NDAA, issued its final report earlier this month, which included 28 recommendations and called for the wholesale replacement of the current system with a new Defense Resourcing System (DRS) it said better matches “budget with strategy” and provides greater resourcing flexibility (Defense Daily, March 6).
“The PPBE panel was extremely well done. The report was excellent,” Reed said on Monday. “Frankly, we have been trying to reform the acquisition and budget system of the Department of Defense since I got here, and we make incremental progress. But we’re recognizing now that time is really not on our side [and] that we have to move much more aggressively. We have to be more responsive and flexible.”
The commission’s chair and vice chair, former DoD Comptroller Bob Hale and former DoD Acquisition Chief Ellen Lord, testified before SASC on the final report’s findings on Wednesday, to include detailing the proposed DRS approach to budget planning.
“[DRS] is much more than just a name change,” Hale said. “It would have processes to give better guidance to the services about how to structure their budgets, consistent with strategy. That sounds academic but it’s not. If you’re facing rapidly changing threats, you need to be sure everybody’s rolling in the right direction to counter those threats. And so we need a better process, and we think we have proposed one, to link budgets to strategy.”
Lord previously told reporters that DRS would offer a “more streamlined set of processes” for budget planning efforts compared to the current PPBE approach, to include allowing DoD’s program executive offices and program managers to make budget changes within the year of execution, building in more flexible reprogramming ability and facilitating more rapid transitioning from research and development into procurement.
“No longer would we have to wait two years [for the budget cycle] because of some of the flexibilities in the year of execution that we’re talking about,” Lord said during the rollout of the commission’s report earlier in March. “I look at DRS as a much more comprehensive resourcing system that responds to requirements.”
Rep. Adam Smith (D-Wash.), ranking member on the House Armed Services Committee, said on Wednesday reforms to the PPBE process will require support from congressional appropriators.
“The appropriators are the challenge here, but for legitimate reasons,” Smith said during a panel at the Reagan Institute’s National Security Innovation Base Summit in Washington, D.C. “The appropriators, they want to track the money very, very carefully.”
“But more flexibility is less oversight, and the appropriators are reluctant to do that. Now I’m not a risk-averse person, so I’m willing to do that. I’m willing to risk the chance that [the Pentagon] might mess it up in order to give them the flexibility to make the innovation we need,” Smith added. “That [PPBE] process is so slow and so cumbersome. We are going to have to, as a Congress and committees, give up a little bit of control and take the heat that comes when a mistake is made if we’re going to be able to allow the type of rapid innovation that is needed.”
Raj Shah, managing partner at Shield Capital and commissioner on the PPBE reform panel, said on Wednesday he was “optimistic” there will be enough support on the Hill to move forward on recommendations included in the final report.
“I’m actually optimistic. I think that there’s broad recognition in the department and in both [chambers] of Congress of that we need reform,” Shah said during a separate panel at the Reagan Institute event.
Doug Bush, the Army’s acquisition chief, spoke on the same panel as Shah and said he agreed the PPBE Commission’s report “made a lot of great points,” noting the service’s own efforts aligned with the specific recommendation to budget around mission areas that would make it easier to move funds around rather than more rigid individual line items.
“Rather than asking for unlimited [research and development] authority, how about more flexibility for certain mission areas that are really important. Tech is moving fast, we need to move faster. That would [give us] the flexibility we’re asking for and I think we’re hopeful that [congressional] members and staff will be open to those conversations,” Bush said.